Aptose Biosciences Inc. (APS) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Megan Dorogi. I'm an Analyst in Jefferies Healthcare Investment Banking. It is my pleasure to introduce Bill Rice, President, Chairman and CEO of Aptose Biosciences, to present at our virtual health care conference. So without further ado, I will hand it over to Bill.

Good afternoon. Thank you, Megan, for giving us the opportunity to present at the Jefferies Healthcare Conference. So first, I'll remind everyone that today, I will make certain forward-looking statements. Also, today's presentation is intended more toward providing an introduction to a new audience because many of the investors who follow us are aware that next week we plan to release all of our new clinical data as part of the European Hematology Association, or EHA Conference. So for those of you who are new to the story, Aptose is a clinical stage biotech company, and we develop small molecule targeted agents for the treatment of life-threatening hematologic malignancies. These are cancers at the bone marrow blood and lymphoid tissues. Our first molecule luxeptinib, abbreviated as L-U-X, pronounces Lux, and formerly known as CG-806, is an oral kinase inhibitor that potently inhibits the wild type and the mutant forms of the BTK kinase. And we all know that BTK is a driver of B-cell cancers, including non-Hodgkin's lymphomas and CLL. Consequently, we're developing Lux in a dose-escalating Phase I trial for the treatment of these B-cell malignancies. Lux also potently inhibits the wild-type and all mutant forms of the FLT3 receptor tyrosine kinase, and FLT3 is a key driver of acute myeloid leukemia, or AML. Therefore, we also are developing Lux for the treatment of patients with relapsed or refractory AML. Our second molecule APTO-253 targets the MYC oncogene and represses the expression of MYC messenger RNA and MYC protein production, and 253 is in a dose escalating Phase I trial for the treatment of patients with relapsed or refractory AML and high-risk MDS. Because time is limited today, I'll speak only about Lux, but slides related to APTO-253 will be included in the slide deck on our corporate website. So let's move directly to Lux, our first-in-class oral kinase inhibitor. What truly distinguishes Lux is its kinase-targeting profile. It potently inhibits clusters of related kinases that are operative in hemo malignancies, thereby inhibiting multiple validated leukemia targets, including FLT3, BTK, CSF1R, PDGFR-alpha, SYK, that's S-Y-K, and others. In fact, Lux is the only molecule known to potently inhibit both BTK and FLT3. Moreover, Lux inhibits the wild type and mutant forms of BTK and FLT3, yet it avoids many of the kinases that negatively impacts safety. Because of its unique kinase targeting profile, Lux is being developed in parallel for the treatment of patients with B-cell cancers, as indicated on the left, as well as for patients with AML, as seen on the right. First, let's address the application of Lux to patients with B-cell cancers. As I mentioned earlier, over-expression of the BTK kinase is one of the drivers of many B-cell cancers and covalent inhibitors of BTK, such as ibrutinib, acalabrutinib and zanubrutinib, target a key cystine residue in the active side of BTK and are highly efficacious against CLL. However, the effectiveness of these covalent BTK inhibitors can be diminished by a mutation in that sifting residue of BTK, and this is called the C41S mutation. In addition, these covalent BTK inhibitors may be discontinued due to intolerability or patients may discontinue due to refractory disease in which the cancer cells survive by activating alternate rescue pathways, such as RAS, ARC, AKT and PPT3, that can compensate for inhibition of BTK. This means inhibiting BTK is necessary, but it is insufficient to adequately treat the deep relapsed and refractory B-cell cancer populations that deploy multiple oncogenic pathways for survival. And we believe Lux may overcome many of these shortcomings of other drugs. Lux suppresses the B-cell receptor pathway by inhibiting not only BTK, but also by suppressing the upstream kinases, including SYK and LYN, that activate BTK. And Lux suppresses downstream oncogenic rescue pathways that cancer cells deploy to circumvent a pure BTK inhibitor. As shown here, Lux docks uniquely into the active site of BTK as a non-covalent inhibitor and inhibits both the wild-type and C41s mutant forms of BTK with low nanomolar potency. It's also important for Lux not to inhibit TEC, EGFR and HER2 kinases that can cause bleeding disorders, skin toxicities or other cardiovascular toxicities caused by certain other BTK inhibitors. To assess the potential of Lux, we ask how well it kills cancer cells directly from patients relative to the BTK inhibitor ibrutinib. Dr. Brian Druker and his team performed these studies. They collected primary samples directly from CLL patients and then tested each sample for sensitivity to Lux and to ibrutinib. They measure the IC50 for each drug against each CLL sample and then transform the data into a heat map. Samples highly sensitive to a drug get a red mark and cells resistant to a drug, get a white mark. So red is good and white is bad. As you can see, Lux directly killed CLL cells more effectively and more broadly than did ibrutinib. Next, we move Lux into a Phase I dose escalating trial with heavily pretreated B-cell cancer patients who failed or are intolerant to multiple lines of established therapy, including other BTK inhibitors. Patients received oral capsules of Lux twice daily over 28-day cycles with an accelerated titration design. The pharmacokinetic graph on the left panel shows that as we escalated dose from dose level 1 of 150 milligrams in the green spheres to 750 milligrams in the blue Spheres, Lux achieved steady state trough levels at the end of Cycle 1 in the range of 2 micro miller. This is important because we believe this exposure level is getting into the active range for heavily pretreated B-cell cancers. The graph on the right panel shows pharmacodynamic activity against key kinases. These studies demonstrated that as the exposure level of Lux increases in the plasma of patients, the BTK and SYK kinases were effectively inhibited. Although we haven't generally highlighted SYK inhibition, we believe SYK inhibition is a contributor to the overall activity of 806 in multiple indications. To date, we've completed the first 4 dose levels of 150, 300, 450 and 600 milligrams. And as we dose escalated, we watch for leading indicators of clinical activity or surrogate markers. Thus far, we've observed target engagement, including dose-related inhibition of phospho or activated form of BTK. We've observed on target lymphocytosis and CLL patients and we've observed tumor reductions with multiple types of B-cell malignancies. Now we're treating patients with 750 milligrams BID at dose level 5, and we plan to dose escalate further to the 900-milligram BID dose level 6. To summarize this trial, we continue to enroll and treat new patients at the 750-milligram dose level. As we dose escalate from the 150-milligram starting dose, the leading indicators of clinical activity for an active BTK inhibitor became apparent, including inhibition of the fossil BTK on target lymphocytosis and minor tumor reductions. The relapsed and refractory patients in this trial are very challenged because they have failed approved therapies and other investigational drugs, but we plan to continue dose escalation to administer as much drug safely as possible and impact multiple targets in these patients. Now let's review the data from the dose escalating Phase Ia/b trial of Lux in patients with relapsed or refractory AML. AML is a very aggressive and very heterogeneous and deadly cancer. This year, approximately 20,000 cases will be diagnosed in the U.S., and more than half that number of patients will die. And once a patient becomes relapsed or refractory, the median overall survival typically is less than 6 months. The most common mutation is an AML is the internal tandem duplication or ITD mutation, that occurs in a FLT3 receptor tyrosine kinase. This FLT3-ITD mutation occurs in approximately 1/3 of all AML patients. Certain fleet through inhibitors hit so many kinases that they're limited by toxicity. Other FLT3 inhibitors are highly selective, and they are often plagued by rapid emergence of drug resistance. These shortcomings of the other agents provide an open door for a new class of drugs like Lux. As illustrated in tables on this slide, Lux is a highly potent against the ITD mutant form of FLT3, shown on the left-hand table, and it retains potency against the wall type and all mutant forms of FLT3 shown in the center table. As shown earlier with CLL patient samples, we ask if true AML cells collected from AML patients would respond to Lux. Once again, Dr. Druker and his lab collected primary samples of cells for more than 200 AML patients. He treated those samples ex vivo with Lux or all the other available FLT3 inhibitors and measured the ICT to cell killing with each drug and with each patient sample and then transformed the data into a heat map. So again, red is good and white is bad. As you scan across the AML patient samples from left to right, you see those with the FLT3-ITD mutation indicated as FLT3-ITD positive were highly sensitive to Lux, and that's indicated by the density of the red marks. Surprisingly, several of those samples with the wild-type FLT3, designated here as FLT3-ITD negative. Lux demonstrated greater potency in killing primary AML cells than all the other FLT3 inhibitors, and that's because Lux is more than just a FLT3 inhibitor. In these AML samples that were collected by Dr. Druker, we sought to identify any mutations that may correlate with sensitivity or with resistant Lux. Shown in the left hand panel, the cells remained highly sensitive to Lux in the presence of any mutation found in FLT3 or in cells with the NPM1 mutation. Cells also remains sensitive to Lux, even in the presence of p53, RAS or IDH1 mutations. In an in vivo mirroring model of human FLT3-ITD AML, we found that 28 days of treatment with Lux resulted in long-term cures through 120 days and no evidence of toxicity. This study used laboratory grown AML cell -- cell lines placed into the mice and may not actually reflect how actual patients -- patient cells will respond. So to ask if Lux could affect actual patient cells in vivo, our colleagues at the MD Anderson Cancer Center performed a PDX model. They collected cells from the bone marrow of an AML patient, in which the AML cells had the ITD and D835 dual FLT3 mutation. And this patient was no longer responsive to other FLT3 inhibitors. In this model, it takes approximately 1 month for the patient's bone marrow cells to colonize the bone marrow of the mouse and then to spill malignant cells into the peripheral blood. Oral administration of Lux, beginning on Day 27, demonstrated strong antileukemic activity and reduced splenomegaly, suggesting that Lux might be useful in the treatment of AML patients that previously failed other FLT3 inhibitors. Next, we move Lux into a Phase I a/b dose escalating clinical trial to treat a broad range of relapsed or refractory AML patients who failed other therapies, such as azacitidine, venetoclax and other FLT3 inhibitors, patients who have a variety of mutations, patients who house FLT3 mutations or wild-type FLT3 as well as patients that are considered unfit for intensive chemotherapy and even patients that have previously failed allogeneic stem cell transplants. We selected the starting dose of 450 milligrams for AML patients, and we observed antileukemic activity at this starting dose, including a patient with a complete response, often referred to as a CR. We since have completed the starting dose level, the Level 1, and dose Level 2 and now are enrolling patients at dose Level 3 in which patients receive 750 milligrams. The profile of Lux illustrates this molecule represents a new class of drugs that does not behave like its competitors. It alone inhibits the wild-type and mutant forms of BTK and of FLT3, and it suppresses other key kinases like SYK. In B-cell cancer patients, Lux is delivering leading indicators of clinical activity in a dose-dependent manner. These include BTK inhibition, inhibition of on target lymphocytosis -- excuse me, induction of on target lymphocytosis and measurable tumor reductions. In AML patients, the starting dose of 450 milligrams resulted in antileukemic activity. One patient with the FLT3-ITD mutation experienced a rapid but transient reduction in abnormal peripheral blood blast, while a second patient experienced a complete response. We now have completed the 450- and 600-milligram dose levels in AML patients, and the 750-milligram dose level is ongoing. We plan to dose escalate further to identify the recommended Phase II dose and then move into the expansion cohorts. Now because time is limited today, I'll skip over the slides related to APTO-253 and move directly to the final summary slides. As shown in the left hand panel, Lux, our oral inhibitor of BTK and FLT3, is now gaining momentum in the clinic. Lux is delivering the expected leading indicators or surrogates of clinical activity in patients with B-cell cancers and has already demonstrated complete response activity in AML. Our plan now is to continue dose escalation to identify our optimal doses and then be ready to move into expansion studies in phenotypically or genotypically selected subpopulations. As shown in the right panel, APTO-253, our MYC gene suppressor, has demonstrated MYC inhibition in humans with AML and MDS, and it continues to move toward higher dose levels that we hope can be therapeutically active. Finally, with these molecules and our expanded team to develop them, we believe Aptose presents an attractive value as a pure-play orphan hematology company that can deliver further opportunities into additional cancers as well as non-cancer indications. The company is well funded into 2023 by a base of sophisticated investors, and we plan to provide value-driving clinical updates during 2021 with a goal to release clinical data at 2 major medical meetings throughout the year: the European Hematology Association, or EHA, meeting in June and the American Society of Hematology, or ASH, meeting during December. In fact, we will present data and posters with Lux and with APTO-253 at the EHA meeting next week on June 11. Separately, we will hold a corporate update event on June 11 to provide a broader view of clinical data to date and to be able to answer questions. And we hope to see you there. So with that, I'll stop, and I'll thank you for listening today.